A blog exploring the intersection of economic thinking and urban planning/real estate development and related big-think themes.

Thursday, August 27, 2009

How to make a lot of money

Paul Krugman finds reasons to be optimistic about the prospects of inter-city high-speed rail -- in some U.S. corridors: "we’ve got a bigger potential market for fast rail than any European country."

Call me crazy, but most comparisons with Europe and Japan are misleading. Most Americans are so used to driving their cars within cities that they are not likely to abandon them between cities. Our experience with urban transit experiments offers a worthy lesson. Since 1970, public transit's market share has declined almost continuously, from about 3.5% (all trips) tpo about 1.5% -- while transit subsidies rose almost continuously.

What would a betting man say about the prospects of HSR?

Here is a report that challenges the California HSR lobby. Official 2030 ridership projections are higher than for comaparable systems in Europe and Japan. When airline competition for the LA-SF run heats up, these fares have been known to plummet.

The Simon-Ehrlich wager is well known. Is there anyone out there willing to bet real money on these HSR ridership foreacasts? How about the forecast's authors?